Oil Prices Jump Back over $51 as Russia Backs Output Cut

Investing.com – Oil prices erased an earlier decline that took U.S. crude below $50 for the first time in more than a year and jumped on reports that Russia recognized the need for major producers to cut production.

New York-traded rose 98 cents, or 1.98%, at $51.27 a barrel by 9:35 AM ET (14:35 GMT).

Meanwhile, , the benchmark for oil prices outside the U.S., traded up 71 cents, or 1.20%, to $59.80.

The Russian Energy Ministry held a meeting with its country’s domestic producers and talks revealed that there was a consensus that an output reduction was necessary and parties were analyzing the size and timing of cuts, Reuters reported citing sources familiar with the talks.

Crude prices had taken a hit earlier on Thursday as reports surfaced that Russian President Vladmir Putin was comfortable with a $60 dollar barrel of oil. The Russian leader had insisted that the budget would be balanced with prices as low as $40 a barrel, spooking investors who read the remarks as a sign that Russia might not agree to further cuts.

West Texas Intermediate oil fell more than 1% to hit $49.46, the first time it had been below $50 since October 2017.

Saudi Arabia has been pushing OPEC and its non-OPEC allies led by Russia to agree to reduce production given the more-than-30% decline in prices since last October.

Analysts believe that the group will announce a reduction of 1.1 million barrels per day when they meet in Vienna on Dec. 6-7.

With the U.S. and Saudi Arabia producing at record levels and rising inventories in the U.S., investors have been concerned that OPEC will be unable to counteract increasing supply.

Traders will meanwhile keep an eye on this weekend’s G20 summit, where Putin is expected to meet on the sidelines with Saudi Arabia’s Crown Prince to discuss plans for output.

In other energy trading, gained 1.72% to $1.3998 a gallon by 9:36 AM ET (14:36 GMT), while advanced 0.51% to $1.8445 a gallon.

Lastly, traded down 3.32% to $4.543 per million British thermal units.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.